Binance Founder CZ Asks Court to Dismiss $1.76B Clawback Lawsuit Filed by FTX
Ex-Binance CEO Changpeng “CZ” Zhao has asked a bankruptcy court to dismiss him from a $1.76 billion clawback suit filed by the FTX trust. The now-bankrupt FTX claims that the funds were “improperly transferred” by Sam Bankman-Fried.
According to Bloomberg Law, CZ claimed that he’s a resident of the United Arab Emirates and that the FTX trust can’t claim it is within Delaware’s jurisdiction.
“The complaint does not establish general jurisdiction because it does not allege that Mr. Zhao is ‘at home’ in Delaware,” Zhao said in a motion to dismiss filed on Monday in the US Bankruptcy Court for the District of Delaware.
Further, he emphasized that the claims have minimal relevance to the US and that the regulations involved have no “extraterritorial application.”
FTX Wants to Recoup $1.76B From Binance: Here’s Why
In November 2024, FTX filed a lawsuit against Binance exchange and its founder CZ. FTX sought to recover $1.76 billion from Binance, claiming it was transferred as part of a fraudulent transaction.
The $1.76 billion transaction was a 2021 share purchase agreement that Binance made with FTX, which the latter claims was fraudulent due to its insolvency at the time.
A Binance spokesperson said at the time that the exchange would defend itself against the “meritless” claims.
This isn’t the first time Binance has filed a motion to dismiss FTX’s $1.76 billion clawback suit. A similar court paper submitted in May to a Delaware judge noted that the beleaguered company attempted to hold Binance accountable for FTX’s crash, and “shift the blame” away from Sam Bankman-Fried.
FTX “Nonsensically Blame” CZ And Binance
The Monday motion read that the FTX trust “nonsensically blame” CZ and Binance for Bankman-Fried’s “pervasive malfeasance”.
“The claims are in any event legally unfounded, and many are outright incoherent,” it added.
Further, Zhao said that the constructive fraud claims don’t meet legal requirements that permit “qualifying transactions” linked to a securities contract under federal law.
CZ pled guilty to US anti-money laundering violations and served four months in prison. Meanwhile, Bankman-Fried is serving a 25-year sentence after being convicted of several offences, including fraud and conspiracy.
The post Binance Founder CZ Asks Court to Dismiss $1.76B Clawback Lawsuit Filed by FTX appeared first on Cryptonews.
